Stage 1: Desktop Due Diligence
Our diligence process starts with an initial assessment, during which a member of the origination team will determine if the matter meets our basic investment criteria.
This initial diligence covers off key issues such as:
- Is the case of a substantially commercial nature and of a reasonable claim size?
- Is the substantive governing law English or common law based, and if the matter is an arbitration, where is the seat?
- Does the matter require more than £100,000 of our capital?
- Does the party against whom the claim is being brought have the ability to meet any award or judgement?
- What is the experience of the legal team and counsel involved with the claim?
Once a case has satisfied our initial criteria we provide indicative commercial terms. If the client is happy to proceed we’ll ask for a period of exclusivity to assess the matter and request a copy of all key documents related to the matter.
Stage 2: Detailed Diligence: Review of Merits & Economic Analysis
Our diligence team consists of experienced and qualified lawyers and finance professionals and they will assess key aspects of the case during a two stage formal diligence process:
Merits Analysis – Facts, Law & Strategy – we conduct an in-depth assessment of the likely prospects of success and the lawyer’s strategy for achieving a settlement or award.
Economic Analysis – We assess the budget, risk allocation, prospective damages and the ratio between the budget and value of the claim. This exercise will include an inquiry and review of:
- Litigation budget – In order to assess the economics of a case, we require a realistic budget similar to a ‘Precedent H Budget’ setting out the total costs to take the case through to trial.
- Quantum – We require evidence of loss or valuation, and a clear explanation of how the quantum has been calculated.
- Recoverability & Enforcement – We will need to be satisfied that the counterparty is creditworthy, has the means to pay or has sufficient assets located in a jurisdiction where enforcement will be feasible.
When a claim has passed the legal and economics diligence reviews we submit it to our investment committee for approval.